Posted on January, 17 2005

As the European Parliament kicks off its debate on new EU chemical law – REACH – WWF reviews two financial market reports that take an upbeat view of the impact of REACH on business.

In a separate initiative several top companies demand a strong REACH in a report published by the Swedish-based International Chemical Secretariat.
 
The two investment reports, one based on chemical companies’ own assessments of REACH, predict that it is unlikely to damage the industry’s investment potential.
 
A report by ING Financial Markets reassures investors that REACH will not threaten the chemical industry’s profitability.

"We see the REACH issue as being very unlikely to pose a threat to the EU majors." In its view the EU’s proposals are "a broadly sensible approach to a problem that clearly needs to be addressed."
 
In a second report, the asset manager of the Halifax Bank of Scotland (HBOS), Insight Investment, polled 19 chemical companies to find out how REACH would impact on them financially.

Major companies did not foresee that REACH would have a great material impact.
 
ING Financial Markets
The ING Financial Markets report, Pan European Chemicals, issued in October 2004, puts the implementation costs in the context of industry turnover.

"The estimated costs (EU estimate) do not represent a structural problem for the chemicals industry" and compares the €2.3bn cost over 11 years to the "industry turnover in that period of c.€5,000bn". It also predicts that "pass through to customers is likely to be successful."
 
The ING Financial Markets analysis concludes "we expect the pan-European majors to take REACH in their stride, there may be winners and losers among the smaller players in the industry." Its view of the impact on SMEs is that "Product withdrawals might be difficult for some SMEs but offer opportunities for others."
 
Significantly when assessing costs of REACH ING chose to use the "EU’s own estimates as being the best available." 
 
Chemical companies – confident that REACH would not have material impact
Insight Investment the asset manager of the Halifax Bank of Scotland (HBOS), polled 22 chemical companies to find out how REACH would impact on them financially including big names such as BASF, Bayer, BOC Group and ICI.
 
Insight Investment found that "Most seem not to be in a position to estimate the likely financial impact of REACH on their businesses, though many expressed confidence that the impact would not be material – in stark contrast to the statements being made by some of their own industry associations."
 
"Many do not appear to have recognised the opportunity available to them to establish new market share by developing substitute chemicals for those noted by the EU to be of greatest concern."
 
A report "What we need from REACH", featuring arguments from several leading companies – including H&M, Electrolux, Boots and M&S – in favour of a strong REACH is published today by the International Chemical Secretariat. 
 

For further information:
Julian Scola, Head of Communications
WWF Detox Campaign
Tel: +32 2 743 8806
E-mail: jscola@wwfepo.org